San Jose Investment Property for Sale - 2024 Rental Home Appreciation

State: California

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The San Jose real estate market is pricy, but it's also known for returning excellent yields. In fact, San Jose is considered an establishment market, just like Chicago, Los Angeles, and Seattle. The reason? High demand and lack of inventory continuously drive home values up and create fierce competition that prices many first-time homebuyers out. Most homes sell in 8 days with a sale-to-list price ratio of 114%.

San Jose's demand, appreciation, and ranking as an establishment market present a great investment opportunity for those who can afford to enter the market.

San Jose's Attractive Housing Market

San Jose is in California's Bay Area and is considered Silicon Valley's capital. As a result, it has more millionaires per capita than any other city and has the most expensive housing market. But don't let that dissuade you. San Jose has a lot to offer real estate investors.

Real estate investors can find nearly every property type in San Jose's homes for sale. They include condos, townhomes, single family homes, and multi-family housing. Whatever you're looking to invest in, San Jose has it.

The San Jose area is home to many great suburbs for investors. They include Los Gatos, Mountain View, Santa Clara, Saratoga, and Sunnyvale.

  • Los Gatos: Los Gatos is located 11 miles southwest of San Jose via I-280 and CA-17. It's known for its hiking, mountain biking, and wineries. The median listing price in Los Gatos is $1,090/sqft, and the median sales price is $2,250,000. The median rent is $4,500/month.
  • Mountain View: Mountain View is located 14 miles northwest of San Jose via US-101. Its headquarters to many large tech companies, including Alphabet Inc., Unicode Consortium, Intuit, and the NASA Ames research center. The median listing price in Mountain View is $1,080/sqft, and the median sales price is $1,680,000. The median rent is $3,800/month.
  • Santa Clara: Santa Clara is located 5 miles west of Downtown San Jose via Coleman Avenue. It's the eighth most populous city in the Bay Area and home to the San Francisco 49ers and Intel. The median listing price in Santa Clara is $907/sqft, and the median sales price is $1,410,000. The median rent is $3,610/month.
  • Saratoga: Saratoga, California (not the one in New York) is located 14 miles southwest of San Jose via CA-17. It's a family-friendly city that's known for its wineries and restaurants. The median listing price in Saratoga is $1,330/sqft, and the median sales price is $3,700,000. The median rent is $3,990/month.
  • Sunnyvale: Sunnyvale is located 12 miles northwest of San Jose via I-280. It's considered the birthplace of the video game industry and known for its restaurants, coffee shops, and parks. The median listing price in Sunnyvale is $1,070/sqft, and the median sales price is $1,650,000. The median rent is $3,700/month.

A few other areas worth noting are Cambrian, a San Jose neighborhood known for its parks and restaurants; Campbell, a residential community 4 miles south of Santa Clara; Cupertino, home to Apple, Inc.; Palo Alto, known as the global center of technology and innovation; Santa Cruz, famous for its surf culture; and Monte Sereno, located in the foothills of the Santa Cruz Mountains. Whatever you're looking for, the San Jose area has something for everyone.

Rental Home Appreciation in San Jose

San Jose has a steady rental market. Nearly a third (27%) of households in San Jose are renter-occupied, and the city has a 4.26% vacancy rate.

According to Realtor, the median listing price in San Jose is $819 per square foot with a median sale price of $1,300,000. Zillow's Home Value Index reports an 18.5% change since last year. The median rent in San Jose is $3,800 per month.

With numbers like these, a San Jose rental property has the potential to generate steady rental income for real estate investors and property management companies.

Economic Growth in San Jose

San Jose is located 48 miles southeast of San Francisco in the heart of Silicon Valley. It's the third largest city in California, behind Los Angeles and San Diego, growing at a rate of 0.56% each year. San Jose is also the seat of Santa Clara County and is home to San Jose State University.

San Jose is considered a technology and financial hub. Apple, Alphabet/Google, Cisco Systems, and Amazon are the largest employers. The San Jose area is also the headquarters of many of the world's top technology companies. The list includes Apple, Alphabet/Google, Cisco Systems, Adobe, Hewlett-Packard, and Western Digital. These employers provide well-paying jobs that fuel the city's growth and economy. In fact, the median household income in San Jose is $117,324, almost four times the national average, and the unemployment rate is just 2.5%.

The San Jose real estate market offers real estate investors high demand, home price appreciation, and a stable economy. San Jose homes offer tremendous investment opportunities for anyone who can afford to enter the market.

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